Adeyemo du Trésor claims dollar will remain dominant currency
Representations of the Bitcoin virtual currency are placed on US dollar banknotes in this illustration taken on May 26, 2020.
Dado Ruvic | Reuters
US Under Secretary of the Treasury Wally Adeyemo said the dollar will remain the dominant currency in the world despite growing interest in cryptocurrencies.
“One of the things we do know is that digital assets present an opportunity in many ways for the economy, but it potentially presents challenges,” Adeyemo told CNBC’s Hadley Gamble on Tuesday in Abu Dhabi, in the United Arab Emirates.
“We know that digital assets have the ability to be used by those who want to illegally move money through the system in a way that doesn’t touch the dollar and that we can’t see that easily. But we think that in the end it works. Together with countries around the world, we can tackle this risk by calling on creators of digital assets to follow anti-money laundering rules more closely. ”
“Ultimately what will influence the position of the dollar in the world are the decisions we make in America about investing in our economy. The reason people are involved in the economy based on the dollar… it’s because they want to invest in America, ”he continued.
Adeyemo said it was because of political decisions, such as the $ 1 trillion infrastructure package signed on Monday, which would help “unlock the potential” of the US economy and create investment opportunities. for other governments.
“As our economy grows, this is an opportunity for the global economy to grow and in this case the dollar will also remain the dominant currency in the world,” he said.
His point of view echoes comments made by Federal Reserve Chairman James Bullard earlier this year who dismissed bitcoin and other digital assets as a serious threat to the dollar’s position in as a global reserve currency.
Elvira Nabiullina, Governor of the Russian Central Bank noted last week it would launch a prototype of the digital ruble platform early next year, according to Reuters. Nabiullina said Russia will undergo a pilot test before making a final decision on launching the digital currency.
Speaking to CNBC in early June, Nabiullina said she expected digital currencies to play a central role in the future of financial systems as the economy evolves online.
Many central banks around the world are developing sovereign digital currencies, which proponents say could promote financial inclusion and facilitate cross-border transactions.
When asked if the prospect of a digital ruble might make US sanctions less effective, Adeyemo replied, “We believe that even if a digital ruble or other digital currencies are put in place, our sanctions will still have the possibility of having an impact on their economies simply because the global economy is always interconnected.
“Companies in Russia still do a lot of business in the world. Much of this business is done in dollars, with American financial institutions and this is because the American economy remains the largest economy in the world,” did he declare. .
“As long as that is the case, and as long as we make the necessary investments, we will still have the option of using our sanctions regime to make sure we prevent what it was created to prevent, which is funding. unlawful through the system and also to hold accountable those who take actions that are not considered to be our national security. ”
In recent years, Washington has imposed sanctions on Russia for a number of reasons, ranging from suspected poisoning of opposition politicians to election interference and cyber attacks.
Adeyemo’s comments add to an October Treasury report that there could be an impact on U.S. cryptocurrency sanctions. He reportedly told a Senate committee last month: “The advent of cryptocurrencies makes it more difficult for sanctions to be effective.”
– CNBC’s Abigail Ng contributed to this report.
Correction: This story has been updated to remove an incorrect reference to where Assistant US Treasury Secretary Wally Adeyemo was speaking.